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Net Neutrality In India
Relevancy G.S. Paper 3 About Net Neutrality and its importance
Recently: There has been a hue and cry in the US recently over the Federal Communications Commission’s
move to scrap net neutrality rules. Indians have been cheering telecom regulator TRAI for upholding net neutrality in its new guidelines
announced in November 2017.
What is it?
The underlying principle of net neutrality, Internet is that once you pay a fee to an ISP such as Airtel, Vodafone or Idea for accessing their data services, you are free to access any content on the Web, without any price or content discrimination.
In simple terms, it means that users should have neutral access to all lawful content and applications on the internet, regardless of the source, without the government or ISPs influencing your choices through pricing or selective access.
Without specific net neutrality regulations, ISPs can block or slow down internet speeds for select sites, or provide preferential treatment to certain content providers over others.
For instance, a telecom operator can enter into an agreement with a company and allow faster access to its website compared to others, or bar the entry of new players in that particular area.
But laws upholding net neutrality prevent this.
Why is it important?
The openness of the internet makes the worldwide web democratic.
With ISPs merely acting as neutral vehicles through which content is ferried, anyone big or small can start a website, distribute content, sell goods or services or offer applications through the internet, even if they don’t have deep pockets or aren’t backed by a big name.
It is this level-playing field which has fostered so much innovation on the Web and allowed so many small businesses to flourish.
If ISPs were given a free pass to control the content, the fear is that they could enter into costly deals with big businesses to stifle competition, by accepting fees to prioritize some content over others.
But opponents to net neutrality say that without these rules, ISPs will be better able to invest in to improving internet speed, infrastructure and optimizing radio spectrum.
In 2015, efforts by Facebook to tie up with telecom companies to offer free basic services in India ran into opposition from net neutrality advocates.
CEO Mark Zuckerberg then argued that, for people who had no internet access at all, restricted access was better than zero access.
Why should I care?
In India, one often finds the larger players in many sectors calling all the shots on strategy and pricing.
In the absence of net neutrality, internet-based businesses may have gone the same way, with larger players across apps, content platforms, services or e-commerce allying to keep out smaller ones.
Hypothetically, think of a Netflix or YouTube being even more dominant than they are now, by being able to tie up with ISPs to speed up access to their own sites.
Today, web-based services are at the centre of the start-up revolution.
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Had there been no net neutrality at the time when the internet was nascent, services such as Skype may not have taken off at all and players such as Facebook or Instagram may not have displaced older entrants, to capture the market.
As a consumer, you may have had to cough up more to access your favourite hotspots on the internet.
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Pradhan Mantri Fasal Bima Yojana
Relevancy G.S. Paper 2 About PMFBY and its importance
Recently: Rural distress is cited as a big factor that slowed the BJP juggernaut in the Gujarat polls. The rising farm distress is crop failures and yield losses triggered by the vagaries of climate. The Pradhan Mantri Fasal Bima Yojana is aimed at shielding farmers from these ups and downs
through insurance.
What is it?
The PMFBY was launched in April 2016.
It compensates farmers for any losses in crop yield.
In the event of a crop loss, the farmer will be paid based on the difference between the threshold yield and actual yield.
The threshold yield is calculated based on average yield for the last seven years and the extent of compensation is set according to the degree of risk for the notified crop.
The scheme is compulsory for farmers who have availed of institutional loans.
The scheme insures farmers against a wide range of external risks — droughts, dry spells, floods, inundation, pests and diseases, landslides, natural fire and lightning, hailstorms, cyclones, typhoons, tempests, hurricanes and tornadoes.
The scheme also covers post-harvest losses up to a period of 14 days.
Why is it important?
While the idea of insuring farmers against crop losses isn’t new, the PMFBY is an attempt to plug the holes in the older crop insurance schemes — the National Agriculture Insurance scheme (NAIS) introduced in 1999 and the Modified NAIS (mNAIS) introduced in 2011.
These older schemes didn’t find too many takers among farmers, the main dampener being their limited risk coverage.
In mNAIS, the premium was capped at 8 to 12 per cent of the sum insured to limit the government’s subsidy outgo.
Thus, for crops where actuarial rates were higher (that is, the premiums were steeper), insurance companies proportionally reduced the sum insured. Many a time, the ‘compensation’ fell way short of even the farmer’s cost of production.
The Fasal Bima Yojana has done away with this cap on premium.
The sum insured per hectare for a farmer is now decided by the District Level Technical Committee and is pre-declared and notified by the State Level Coordination Committee on Crop Insurance.
The farmer also pays less — the premium he shells out is 2 per cent of the sum insured for all kharif crops and 1.5 per cent of it for all rabi crops.
For horticulture and commercial crops, the premium is 5 per cent of sum covered. The remaining premium is paid by the government.
Why should I care?
To secure India’s food security, it is essential that farmers earn reasonable rewards for the humongous risks they take on in agriculture.
Agriculture directly contributes a 15 per cent slice of India’s GDP and indirectly makes up nearly half of its workforce.
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In the event of a monsoon failure or an extreme weather, the farmers’ losses inevitably boomerang on the economy and consumer confidence.
If you’re an investor, the prospects of the economy, companies that make agri-inputs such as fertilisers, farm equipment and agrochemicals and the entire consumption pack, hinge on how agriculture fares.
If it works as it should, the crop insurance scheme can go a long way in ensuring more consistent income to farmers.
But there are problem areas to the scheme that farmers are dissatisfied with.
However not all key crops are included in the list of notified crops eligible for insurance. Premium setting has been a contentious issue.
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SEBI bans PricewaterhouseCoopers
Relevancy G.S. Paper 2 What was Satyam scam and what decision SEBI has taken with respect to Pricewaterhouse Coopers
What was satyam scam?
The 'Satyam Computer Services, scandal was a corporate scandal affecting India-based company Satyam Computer Services in 2009, in which chairman Ramalinga Raju confessed that the company's accounts had been falsified
What decision has SEBI taken with respect to Pricewaterhouse Coopers?
Market regulator Sebi (Securities and Exchange Board of India) barred the network entities of international auditing firm guilty Price Waterhouse from issuing auditing certificates for the next two years, finding a "systemic problem" in the audit processes carried out by the PW entities at the time of Satyam scam.
In addition to ordering the disgorgement of over Rs 13 crore from Price Waterhouse (PwC) and two of its former partners, the capital regulator assured the present order would not affect the firm's audit works taken up during 2017-18 fiscal year.
By passing a stringent order against one of Big Four auditors in the world, Sebi seems to have set a strong message that wrong practices and market abuse would not be tolerated in India
Sebi says it carried out the investigation into the affairs of SCSL (Satyam Computer Services Limited) to ascertain whether the provisions of the SEBI Act were violated, and it found that certain directors and employees of SCSL connived and collaborated in the overstatement, fabrication, falsification and misrepresentation in the books of account and financial statements of SCSL, whose statutory auditor from April 1, 2000, was Price Waterhouse (PwC).
10 major points extracted from Sebi order
Sebi has imposed a two-year ban on entities/ firms practicing as chartered accountants in India under the brand and banner of PwC from directly or indirectly issuing any certificate of audit of listed companies, compliance of obligations of listed companies and intermediaries registered with the regulator.
The capital market regulator has confirmed the published books of account of Satyam contained false and inflated current account bank balances, fixed deposit balances, fictitious interest income revenue from sales and debtors' figures, and for several years.
Price Waterhouse Bangalore and its two erstwhile partners - S Gopalakrishnan and Srinivas Talluri Noticee - have been asked to jointly disgorge the wrongful gains of over Rs 13 crore with interest calculated at the rate of 12% per annum from January 7, 2009, till the date of payment.
The noticees have been asked to pay the said amount in the next 45 days. These two partners can't also issue any certificate of audit of listed companies, compliance of obligations of listed companies and intermediaries registered with Sebi for the next three years.
The order says the noticees were granted an opportunity by Sebi to conduct an inspection of all the documents collected during the investigation, and PwC entities and the representatives of engagement partners took out separate inspection of records. The order says the auditors did not independently check the veracity of the monthly bank statements and fixed deposit receipts (FDRs) and relied upon them for their certification process.
PW firms benefited from the relationship from SCSL by having received a fee of over Rs 23 crore during 2000-2008. Of this, over Rs 13 crore was paid towards PW Bangalore for the audit of SCSL, says the order.
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The network structure of operations adopted by the international accounting firm should not be used as a shield to avoid legal implications arising out of the certifications issued under the brand name of the network, the Sebi order said.
Highlighting that common investors were, in a way, fooled as Satyam's audit certifications - which they fully trusted as it was attested by internationally reputed firm Price Waterhouse - were false and misleading, the order says the long period during which the falsification of account books took place points to a systemic problem in the audit processes carried out by the PW entities.
Sebi has also said the objective of insulating the securities market from such fraudulent accounting practices perpetrated by an international firm of repute will be ineffective if the directions do not bring within its sweep the brand name PwC.
Sebi points out that it is important for it to take stern view of the market abuse and fraudulent practices, particularly when persons tasked with protecting the interest of investors are themselves hand-in-glove with the main perpetrators of the fraud.
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The Bamboo Curtain
Relevancy G.S. Paper 1 Early forest acts on Bamboo Significance of recent amendment of IFA 1972 Economic importance of Bamboo
Recently: The Indian Forest Act (IFA) of 1927 has recently been amended, formalizing what was initially done
through an ordinance. Lok Sabha amended Section 2(7) of the Indian Forest Act, 1927 which had led to bamboo being seen
as timber.
A brief account of earlier forest acts on bamboo:-
Bamboo is hollow and can grow up to towering heights, and it’s a grass.
The law dating back to the colonial era classified bamboo as a tree, but the colonial-era definition of bamboo had an economic logic.
Forests had to be protected because they were repositories of timber, Bamboo was slotted as a “forest produce” and placed in the same category as palm and other trees.
After Independence, bamboo being a tree was under the control of the forest department and it found its way to markets largely through auctions held by the department.
What makes the amendment significant?
In 1996, the Supreme Court ruled that “felled bamboo” was not timber and the Forests Rights Act (FRA), 2006 also classified bamboo as a “non-timber forest produce”.
But both the apex court and the FRA stopped short of aligning bamboo with its taxonomic classification.
Section 2(7) of the 1927 Act was never amended and this created confusion in implementing the court ruling and the FRA.
The recent amendment has removed bamboo from the category of “timber” under colonial-era law and it enlisted under the category of grass.
It will remove the forest department’s hold over the natural resource and will reduce dependence on bamboo imports.
Why is bamboo economically important?
India has nearly 14 million hectares of bamboo forests, and it has 30 per cent of the world’s bamboo resources.
Bamboo can fully regenerate in three to five months, while other commercially-important woody plants take about five years to mature.
Bamboo has a big role in the agarbatti industry, India produces 3,000 tonnes of them creating employment around north eastern states.
New form of fibre is being derived from bamboo to weave clothes which provide employment to tribal population of Central India.
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Virtual Id And Limited KYC
Relevancy G.S. Paper 3 About Virtual ID and its need Security concerns of government over issue of privacy Limited KYC work
Recently In an attempt to address security and privacy concerns around leakage of Aadhaar numbers and
data, the Unique Identification Authority of India on Wednesday introduced two new measures - virtual ID and limited KYC.
What is virtual ID
The virtual identity or virtual ID will be a random 16-digit number mapped to the Aadhaar number of a citizen, and will come with an expiration date.
The VID will not be duplicable by agencies performing authentication of Aadhaar number, and hence will ensure safety of the Aadhaar number.
How can VID be generated?
VID can be generated and revoked only by the Aadhaar number holder through channels such as the Aadhaar portal and the mAadhaar mobile app.
The older VID gets canceled each time the Aadhaar number holder issues a new one.
Why is the government concerned about the issue of privacy?
The issue of privacy of citizen data has picked up steam in the last week after The Tribune reported that an anonymous WhatsApp number was selling access to the entire Aadhaar database for as low as Rs 500.
How will the limited KYC work?
The UIDAI has further introduced limited KYC (know your customer) process wherein only some entities, categorised as global authentication user agency (global AUA) will be allowed to store a citizen's Aadhaar number, while others, known as local AUAs will not be allowed to store Aadhaar numbers.
These agencies will be given a UIDAI token specific to them, to enable them to uniquely identify their customers.
The UID token, a unique character for system usage, will be unique to every authentication request made by a global or local AUA.
Conclusion
Currently, every agency that uses Aadhaar for KYC authenticates a user and often stores a person's Aadhaar number.
In the absence of strong data protection and privacy laws, the issue of what can be done with stored citizen information is a grey area.
The new measures do not specify what happens to the Aadhaar numbers that have already been stored by public or private entities. It also does not mention which AUAs would qualify as global or local.
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